Afreximbank, 8 Egyptian banks prep for US$525mn electricity loan

A consortium of eight Egyptian banks in addition to the African Export-Import Bank (Afreximbank) is bracing for board approvals to finalise a US$525 million finance, a senior banking source told Amwal Al Ghad Monday.

The finance will go for the state-run Egyptian Electricity Holding Company (EEHC) to complete works on two power plants; located in Assiut, some 320 kilometres (200 miles) south of Cairo, and Damietta, situated in about 200 kilometres (120 miles) north of Cairo.

For the banking alliance, it encompasses Afreximbank, the National Bank of Egypt (NBE), Banque Misr, the Commercial International Bank (CIB), Arab African International Bank (AAIB), the Arab Banking Corporation (ABC), Bank Audi Egypt, Egyptian Gulf Bank (EGB), and AlexBank.

The African Export-Import Bank (Afreximbank) is a pan-African Eximbank founded in 1993, financing and promoting intra- and extra-African trade.

The nine banks are expecting to obtain their board of directors’ approvals in the coming few hours, a crucial step to start disbursing the finance within the current week or early next week at the maximum, the source added.

The Egyptian Electricity Holding Company said the loan shall be designated to pay the contractors’ dues i.e. in favour of Orascom Construction and General Electric, which are working on the two plants. The loan is to be paid back over five years.

Orascom Construction and General Electric are working to execute Assiut combined cycle power plant project, which aims to deliver 375 megawatts to the national electricity network and to operate three units out of eight as the first phase.

Orascom Construction has already completed the first phase of West Damietta power plant with a capacity of 250 megawatts.